MCBC Holdings, Inc. releases MasterCraft Q1 fiscal 2018 results
MCBC Holdings, Inc., the parent entity of MasterCraft Boat Co., LLC and NauticStar, LLC announced a net sales rise in performance sports boats during the first quarter of fiscal 2018.
The 2018 first-quarter results reflect MasterCraft only. Net sales for the first quarter increased to $65 million, up 7.2 percent from $60.7 million in the prior-year period.
Net income totaled $7 million for the 2018 first quarter and the prior-year period.
Full fiscal year 2018 net sales growth is expected to be in the 35 percent range including nine months of NauticStar’s projected net sales.
“Top-line sales grew nicely in the first quarter, driven by demand for performance sports boats. We continue to deliver outstanding working capital management” said Terry McNew, MCBC Holdings, Inc. president and chief executive officer
MCBC Holdings, Inc. acquired NauticStar in October. NauticStar’s outboard bay, deck and offshore center console boats provide MasterCraft with additional product diversity and opportunities for growth going forward, McNew said.
With more than 15 years of boat manufacturing experience — including a 200,000 square-foot manufacturing facility — NauticStar has a network of dealers and customers including professional and sport fishermen, and recreational and pleasure boating enthusiasts.
Gross profit for the first quarter, increased $0.3 million, or 2 percent, to $18.2 million, versus $17.8 million in the fiscal 2017 first quarter.
Gross margin decreased to 27.9 percent from 29.3 percent for the prior-year period.
The increase in gross profit resulted from a rise in unit sales volume, and was partially offset by unfavorable product mix and an increase in changeover costs as MasterCraft added new boat features to 2018 models. This resulted in a gross margin decline when compared to the prior year.
“We continue to see solid retail activity and are comfortable with our current inventory levels,” McNew said. “We remain optimistic about fiscal 2018 and we’re diligently working with our strong dealer network to maximize their opportunities moving forward.”
Selling and marketing expense increased $0.7 million to $2.7 million for the first quarter ended Oct. 1, 2017, compared to the year-earlier quarter primarily due to increased dealer training costs and increased promotion activities with the introduction of the redesigned 2018 MasterCraft XStar.
General and administrative expense totaled $4.3 million versus $4.1 million for the prior-year period.
This increase stemmed mainly from a rise in advisory fees related to the NauticStar acquisition, partially offset by a decrease in litigation costs.
“NauticStar provides us with a presence in two of the boating industry’s fastest growing segments: saltwater fishing and outboard propulsion,” McNew said. “Additionally, NauticStar’s year-over-year unit growth is among the strongest in the 18- to 28-foot category and demand domestically currently exceeds supply. We look forward to leveraging our industry-leading strengths in operational excellence and financial management to further improve NauticStar’s output, quality and margin.”
Since acquiring NauticStar, MCBC Holdings, Inc. has hired Tim Schiek, a 22-year marine industry veteran to head the company as its new president.
Schiek spent more than 20 years with Brunswick Corp., serving in a variety of leadership roles, including president of Recreational Boat Group and Sea Ray where he led his team in a business transformation, and president of Brunswick’s Boston Whaler Group, the Fiberglass Fish Boat Category and Harris Kayot.
“We are very excited to welcome Tim as the new president of NauticStar,” McNew said. “He is a seasoned marine industry veteran that has successfully run multiple well-known marine brands. Tim also brings keen financial, operational and dealer relationship experience. His expertise will be invaluable as we work to optimize NauticStar.”
The American Boatbuilders Association nominated and unanimously voted MasterCraft for inclusion into its buying group. ABA membership includes independent boat manufacturers.
“Looking ahead, we’re optimistic about prospects for fiscal 2018 with the sales and profit growth opportunities we have for NauticStar and MasterCraft,” McNew said. “We remain committed to developing new and innovative products, further penetrating the entry-level and mid-line segment of the performance sport boat category, capturing share from adjacent boating categories, strengthening our dealer network and driving margin expansion through continuous operational excellence.”
